One of the more overlooked aspects of our industry is that oil and gas companies like ExxonMobil are not just big contributors to the economy, we are also really big taxpayers.
An article this week from 24/7 Wall St. and posted on Yahoo!’s financial site makes that point very clear with its look at the Top 10 corporate taxpayers in 2012. Three of the Top 10 U.S.-based, publicly traded taxpayers identified in the article are so-called “Big Oil” companies: ExxonMobil, Chevron, and ConocoPhillips.
In fact, ExxonMobil and Chevron are ranked #1 and #3 respectively, with income tax expense far in excess of many of the other large corporations in the Top 10.
We topped the list with a reported $31 billion in corporate income tax expense; Chevron reported $20 billion.
These numbers should give some idea about the size of the global industry in which companies like ours operate. Consider that the companies that ranked 6 through 10 – companies the article rightly calls “mega-corporations” – averaged about $6.6 billion in annual corporate income tax expense.
For some more perspective, consider that ExxonMobil’s $31 billion is larger than the pre-tax earnings reported by seven of the companies on the list.
Last year I noted how The New York Times found that big energy firms like ours not only pay the most in absolute terms, we also had the highest effective income tax rate – 37 percent – for the years 2007 to 2012. Meanwhile calculations by the American Petroleum Institute (API) show a 44.6 percent overall effective corporate income tax rate for our industry for the decade 2002 to 2012.
This is important. One reason I am so keen to highlight reports like these is because there are many who purposefully and repeatedly distort the facts in an effort to make our highly taxed industry pay even more.
And in an op-ed in a Capitol Hill newspaper, Rep. Charles Rangel, the former chairman of the House Ways and Means Committee, revealed a fundamental misunderstanding of how companies like ExxonMobil are taxed.
We can’t have productive discussion on tax and regulatory policy if the participants in our policy debates don’t know or choose to ignore the most fundamental facts. Kudos to Yahoo! and 24/7 Wall St. for diving into the numbers and challenging the rhetoric that is so clearly designed to distort our public dialogue and policy discussions.